Socially responsible investing shop Pax World Funds of Portsmouth, N.H. is warning investors of Internet scams, one of which recently targeted its customers.

The firm is offering tips to help investors avoid being taken by "high-pressure" e-mails promising outrageously high returns while charging extremely high fees and directing readers to a faulty Web site. In Pax’ case, the e-mail directed investors to a phony, unauthorized Web site,, which looked just like its official site and promised returns of 657% a year, according a Securities and Exchange Commission release. The scheme caused only about $400 worth of damage because Pax World was alerted to the fake site before too much money was sent to scammers, according to published reports. also lifted the description of Pax World’s high-yield mutual fund verbatim and falsely listed Laurence A. Shadek as its chairman and Thomas W. Grant as its president, the SEC contends. Both executives hold those posts legitimately with the real firm, Pax World. Furthermore, the high-yield offering from FairPax is not registered with the SEC.

"Our eye-opening experience led us to conclude that mutual fund investors and investment companies need to know more about the dangers posed by phishing," Grant said in a statement. "What we are doing today is sharing what we learned about phishing swindles in the mutual fund context and what people can do to protect themselves. It is our hope that this information will be of real value to all mutual fund investors."

The basic fraud scheme will involves an e-mail, seemingly from a trusted company or government agency and will ask the recipient for account or other sensitive information. In the context of mutual funds, it could direct potential victims to faulty Web sites or coax them into making transactions out of their legitimate investments and into the false ones.

In response, Pax is suggesting that investors keep a sharp eye out for high-pressure emails and be cautious before divulging personal information and be careful prior to making transactions on a Web site you have been directed to. Pax suggests only conducting transactions on secure sites. One positive sign that it may be secure is that the address in the toolbar of your Web browser starts with https:, not http:. Another clue is the padlock icon on your browser frame. However, criminals are getting smarter and more sophisticated, so these solutions are not foolproof.

Pax also suggests that individuals be on the lookout for suspicious web addresses and check their statements carefully. The firm also urges individuals to take advantage of technology available to fight these schemes and to report suspicious activity or problems.

This type of scheme is not new to those in the know. At an Investment Company Institute Operations conference in New Orleans last year, security and industry experts as well as a representative from the Federal Bureau of Investigations warned the industry of such schemes and cautioned that as cyber crime grows, the industry and its customers will increasingly be under attack.

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